Summary Compensation Table
The following table provides certain summary information concerning compensation awarded to, earned by or paid to the individuals who served as our principal executive officer at any time during fiscal 2023 and 2022, and our two other most highly compensated officers in fiscal 2023 and 2022. These individuals are referred to in this Annual Report as the “named executive officers.”
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($)(1) | All Other Compensation ($) | Total ($) |
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| Matthew Pierce | 2023 | $225,000 | $56,250 | — | $61,025 | — | $342,275 |
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| Chief Executive Officer | 2022 | $224,134 | $56,250 | — | $29,520 | — | $309,904 |
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| Craig Finster | 2023 | $225,000 | $56,250 | — | $73,745 | — | $354,995 |
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| President and Chief Financial Officer | 2022 | $224,134 | $56,250 | — | $29,520 | — | $309,904 |
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| Alex Peachey | 2023 | $176,090 | $60,000 | — | $70,305 | — | $306,395 |
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| Chief Technology Officer | 2022 | $200,000 | $30,000 | — | $29,520 | — | $259,520 |
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| (1) | The amounts reported in the “Option Awards” column reflect the aggregate fair value of stock-based compensation awarded during the year computed in accordance with the provisions of the Financial Accounting Standard Board Accounting Standards Codification Topic 718, or ASC 718. See Note 3 to our consolidated financial statements for the year ended December 31, 2023 including elsewhere in this annual report regarding assumptions underlying the valuation of equity awards. These amounts reflect the accounting cost for these stock options and do not reflect the actual economic value that may be realized by the executive officer upon the vesting of the stock options, the exercise of the stock options, or the sale of the common stock underlying such stock options. |
Employment Contracts and Potential Payments Upon Termination or Change in Control
On June 30, 2016, we entered into employment agreement with Matthew Pierce, our Chief Executive Officer, on May 1, 2019, we entered into an employment agreement with Craig Finster, our President and Chief Financial Officer, and on April 20, 2020, we entered into an employment agreement with Keyvan Peymani, our Executive Chairman of the Board. The original terms of the employment agreements are two years, which shall be automatically renewed for one year upon expiration of the prior term unless either party provides at least six-month notice to the other party that it does not wish to renew the agreement.
The following is a summary of the compensation arrangements set forth in each employment agreement described above:
| Executive | Title | Annual Base Salary | Annual Cash Bonus | Equity Compensation in Warrants (In Shares) (2) | Equity Compensation in Options (In Shares) (3) |
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| Matthew Pierce | Chief Executive Officer | $225,000 | (1) | 1,838 | 735 |
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| Craig Finster | Chief Financial Officer | $225,000 | (1) | - | 26 |
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| Keyvan Peymani | Executive Chairman of the Board | $160,000 | (1) | - | 26 |
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| (1) | Each of the executive officers receives an annual cash bonus of twenty-five percent (25%) of his base salary, and an annual performance cash bonus in accordance with EBITDA achievement in the relevant fiscal year. In particular, each executive officer receives a bonus equal to 50%, 100% or 200% of his base salary if we generate EBITDA of at least $1 million, $2 million or $4 million, respectively, within the then current fiscal year. Each executive officer is also eligible for a discretionary cash bonus determined by our board of directors. |
| (2) | Representing warrants to purchase our common shares at $741.60 per share, which shall vest in accordance with the achievements of certain performance milestones or service date. |
| (3) | The options vest in three installments with one-third vesting immediately and one-third vesting on each of the first and second anniversaries of the date of the employment agreement and have an exercise price of $508.80-$604.80 per share. |
If the employment agreement is terminated for “good reason” as defined therein and we receive proper notice or if the employment agreement is involuntarily terminated other than for “just cause” as defined therein, then we shall pay the executive officer (i) any accrued benefits and (ii) a severance amount equal to the sum of (w) 12 months of his then-current base salary; (x) his maximum discretionary bonus for the then-current fiscal year; (y) his annual bonus for the prior fiscal year; and (z) his maximum performance cash bonus provided in the employment agreement for the then-current fiscal year. In addition, in this circumstance, the executive’s equity compensation shall be fully and immediately vested and exercisable, as applicable. If the employment agreement is terminated without good cause, then the executive officer shall receive his accrued benefits, the prorate bonus and the performance cash bonus, if any, as of the termination date. Upon termination of this agreement, we will pay the executive officer any lump sum payment due to him under his agreement within ten business days of the date of termination.
The following table summarizes the “good reason” payments:
| Executive | Title | Annual Base Salary | Good Reason Payment |
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| Matthew Pierce | Chief Executive Officer | $225,000 | $731,250 |
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| Craig Finster | Chief Financial Officer | $225,000 | $731,250 |
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| Keyvan Peymani | Executive Chairman of the Board | $160,000 | $520,000 |
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Pursuant to the terms of our employment agreements entered into with certain of our executive officers, in the event of a Change of Control, immediately effective as of the date of such Change of Control, unvested Stock Options, Performance Warrants and any other options or equity awards previously granted by us to the executive officers shall fully and immediately vest, and shall be fully and immediately exercisable by the executive officer. In addition, upon a Change of Control, we are obligated to pay the executive officers immediately upon the date of the Change of Control a Performance Bonus of 200% of the base salary of the executive officer for the then-current fiscal year, in addition to any amounts that the executive officer is entitled to receive as a result of such executive officer’s termination of employment or any other event.
The following table summarizes the executive change of control bonuses:
| Executive | Title | Annual Base Salary | Change of Control Bonus |
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| Matthew Pierce | Chief Executive Officer | $225,000 | $450,000 |
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| Craig Finster | Chief Financial Officer | $225,000 | $450,000 |
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| Keyvan Peymani | Executive Chairman of the Board | $160,000 | $320,000 |
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In the context of our employment agreements with certain of our executive officers, Change of Control means the occurrence of any of the following events:
| (i) | the receipt by us of an insider report or other statement filed in accordance with the applicable securities legislation of a relevant jurisdiction indicating that any person: (a) has become the beneficial owner, directly or indirectly, of our securities representing more than 50% of our common shares; or (b) has sole and/or shared voting, or dispositive, power over more than 50% of our common shares; or |
| (ii) | a change in the composition of our board of directors occurring within a two-year period prior to such change, as a result of which fewer than a majority of our directors are Incumbent Directors. “Incumbent Directors” shall mean directors who are either: (a) our directors as of the effective date of the applicable executive officer’s employment agreement (the “Effective Date”); or (b) elected, or nominated for election, to our board of directors with the affirmative votes of at least a majority of the directors on our board of directors who had been directors at the Effective Date or two years prior to such change and who were still in office at the time of such election or nomination; or |
| (iii) | the solicitation of a dissident proxy, or any proxy not approved by the Incumbent Directors, the purpose of which is to change the composition of our board of directors with the result, or potential result, that fewer than a majority of our directors will be Incumbent Directors; or |
| (iv) | the consummation of our merger, amalgamation or consolidation of with or into another entity or any other corporate reorganization, if more than fifty percent (50%) of the combined voting power of the continuing or surviving entity’s securities outstanding immediately after such merger, amalgamation, consolidation or reorganization are owned by persons who were not our shareholders immediately prior to such merger, amalgamation, consolidation or reorganization; or |
| (v) | the commencement by an entity, person or group (other than us or any of our wholly owned subsidiaries) of a tender offer, an exchange offer or any other offer or bid for more than 50% of our common shares; or |
| (vi) | the consummation of a sale, transfer or disposition by us of all or substantially all of our assets; or |
| (vii) | the commencement of any proceeding by or against us seeking to adjudicate us as bankrupt or insolvent, or seeking liquidation, winding-up, reorganization, arrangement, adjustment, protection, relief or composition of us or our debts, under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or for the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property; or |
| (viii) | the approval by our shareholders of a plan of our complete liquidation or dissolution. |
In the case of the occurrence of any of the events set forth above, a Change of Control shall be deemed to occur immediately prior to the occurrence of any such events. An event does not constitute a Change of Control if its sole purpose is to change the jurisdiction of our organization or to create a holding company, partnership or trust that will be owned in substantially the same proportions by the persons who held our securities immediately before such event. Additionally, a Change of Control is not deemed to have occurred, with respect to an executive officer if such executive officer is part of a purchasing group that consummates the Change of Control event.
Change of Control
On September 28, 2019, our board of directors approved a cash distribution upon a Change of Control, defined as the acquisition by a purchaser, directly or indirectly, of our shares, which, assuming the conversion, exchange or exercise of any of our convertible or exchangeable shares beneficially owned by the purchaser, results in the purchaser beneficially owning shares that would entitle the purchaser for the first time to cast more than 50% of the votes attaching to all shares in our capital that may be cast to elect directors; the sale, lease, exchange or other disposition of all or substantially all of our assets to a purchaser; or an amalgamation, merger, arrangement or other business combination involving us and a purchaser that results in the purchaser or security holders of the purchaser owning, directly or indirectly, shares of the continuing entity that entitle the purchaser or such security holders of the purchaser, as the case may be, to cast more than 50% of the votes attaching to all shares in the capital of the continuing entity that may be cast to elect directors, whereby 5% of the Purchase Premium, defined as the difference between the average of our market capitalization based on the closing price of our common shares over 60 days prior to the announcement of any change of control event, and our final purchase price, if positive, be distributed to our employees and key consultants, subject to the discretion of our board of directors at the recommendation of our compensation committee.
Equity Incentive Plans
On May 17, 2017, our board of directors adopted our 2017 Stock Option Plan, or the 2017 Plan, to provide an additional means to attract, motivate, retain and reward selected employees and other eligible persons. Our stockholders approved the 2017 Plan on or about June 29, 2017. Employees, officers, directors, advisors and consultants that provided services to us or one of our subsidiaries are eligible to receive awards under the 2017 Plan. The total number of common shares that are at any time reserved for issuance under the 2017 Plan and under all other management option plans and employee stock purchase plans, if any, cannot exceed in the aggregate a number of common shares equal to 15% of the number of common shares issued and outstanding at that time. Options have a maximum term of ten years and vesting is determined by our board of directors.
On May 15, 2021, our board of directors adopted a US sub plan as part of our 2017 Stock Option Plan. The US sub plan allows for the explicit grant of incentive stock options (“ISOs”) to US resident non-officer employees. The provision for the sub plan was subject to a confirming shareholder vote within 12 months of its adoption, which vote was taken on November 17, 2021.
As of December 31, 2023, stock option grants for the purchase of an aggregate of 30,263 common shares had been made under the 2017 Plan, and 1,273 of those stock options had been cancelled or exercised. As of that date, there remained 346,912 common shares authorized under the 2017 Plan remained available for award purposes.
Our board of directors may amend or terminate the 2017 Plan at any time, but no such action will affect any outstanding award in any manner materially adverse to a participant without the consent of the participant.
The following information is a brief description of the 2017 Plan, which is filed as an exhibit to this Annual Report:
| a) | Number of Shares: At no time shall the number of common shares reserved for issuance to any one person pursuant to stock options granted under the 2017 Plan or otherwise, unless permitted by regulatory authorities and by a vote of shareholders, exceed five (5%) percent of the outstanding common shares in any 12-month period. |
| b) | Option Price: The option price of a stock option granted under the 2017 Plan shall be fixed by our board of directors but shall be not less than the Market Price of our common shares at the time the stock option is granted, or such lesser price as may be permitted pursuant to the rules of any regulatory authority having jurisdiction over our common shares issued, which rules may include provisions for certain discounts in respect to the option price. For the purpose of the 2017 Plan, the “Market Price” at any date in respect of our common shares shall mean, subject to a minimum exercise price of $0.10 per option, the greater of: |
| a. | the closing price of our common shares on a stock exchange on which our common shares are listed and posted for trading or a quotation system for a published market upon which the price of our common shares is quoted, as may be selected for such purpose by our board of directors (the “Market”), on the last trading day prior to the date the stock option is granted; and |
| b. | the closing price of our common shares on the Market on the date on which the stock option is granted. In the event that such shares did not trade on such trading day, the Market Price shall be the average of the bid and ask prices in respect of such shares at the close of trading on such trading day as reported thereof. In the event that our common shares are not listed and posted for trading or quoted on any Market, the Market Price shall be the fair market value of such shares as determined by our board of directors in its sole discretion. |
| c) | Reduction in Option Price: The option price of a stock option granted under the 2017 Plan to an insider of our company (as that term is defined in the Securities Act (British Columbia)) shall not be reduced without prior approval from the disinterested shareholders of our company. |
| d) | Payment: The full purchase price payable for shares under a stock option shall be paid in cash or certified funds upon the exercise thereof. A holder of a stock option shall have none of the rights of a shareholder until the shares are paid for and issued. |
| e) | Term of Option: Stock options may be granted under the 2017 Plan for a period not exceeding ten years. |
| f) | Vesting: Unless our board of directors determines otherwise at its discretion, a stock option shall vest immediately upon being granted. |
| g) | Exercise of Option: Except as specifically provided for in the 2017 Plan, no stock option may be exercised unless the optionee is at the time of exercise an Eligible Person (as defined by the 2017 Plan). If the optionee is an employee or consultant, the optionee shall represent to us that he or she is a bona fide employee or consultant of our company. The 2017 Plan shall not confer upon the optionee any right with respect to continuation of employment by our company. Leave of absence approved by an officer of our company authorized to give such approval shall not be considered an interruption of employment for any purpose of the 2017 Plan. Subject to the provisions of the 2017 Plan, a stock option may be exercised from time to time by delivery to us of written notice of exercise specifying the number of shares with respect to which the stock option is being exercised and accompanied by payment in full, by cash or certified check, of the purchase price of the shares then being purchased. |
| h) | Non-transferability of Stock Option: No stock option shall be assignable or transferable by the optionee, except to a personal holding corporation of the optionee, other than by will or the laws of descent and distribution. |
| i) | Applicable Laws or Regulations: Our obligation to sell and deliver shares under each stock option is subject to our compliance with any laws, rules and regulations of Canada and any provinces and/or territories thereof applying to the authorization, issuance, listing or sale of securities and is also subject to the acceptance for listing of the shares which may be issued upon the exercise thereof by each stock exchange upon which our common shares are then listed for trading. |
| j) | Termination of Options. Unless the option agreement provides otherwise, all stock options will terminate: |
| a. | in the case of stock options granted to an employee or consultant employed or retained to provide investment relations services, 30 days after the optionee ceases to be employed or retained to provide investment relations services; |
| b. | in the case of stock options granted to other employees, consultants, directors, officers or advisors, 90 days following |
| i. | our termination, with or without cause, of the optionee’s employment or other relationship with our company or an affiliate of our company, or |
| ii. | the termination by the optionee of any such relationship with our company or an affiliate of our company; |
| iii. | or in the case of death or permanent and total disability of the optionee, all stock options will terminate 12 months following the death or permanent and total disability of the optionee, and the deceased optionee’s heirs or administrators may exercise all or a portion of the stock option during that period. |
Any stock options granted under the 2017 Plan that are cancelled, terminated or expire will remain available for granting under the 2017 Plan at the current Market Price
| k) | Amendments. Subject to the approval of regulatory authorities having jurisdiction, our board of directors may from time to time amend or revise the terms of the 2017 Plan, or may terminate the 2017 Plan at any time; provided, however, that no such action shall adversely affect the rights of any optionee under any outstanding stock option without such optionee’s prior consent. Upon the mutual consent of the optionee and our board of directors, the terms of an option agreement may be amended, subject to regulatory approval and shareholder approval as may be required from time to time. |
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth outstanding equity awards to our named executive officers as of December 31, 2023:
| Option Awards · Stock Awards |
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| Name | Number of Shares Underlying Unexercised Options (#) Exercisable | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock that have not Vested | Market Value of Shares or Units of Stock that have not Vested |
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| Matthew Pierce | 3 | $604.80 | April 2, 2024 | - | - |
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| Matthew Pierce | 156 | $1,087.20 | Sept 27, 2024 | - | - |
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| Matthew Pierce | 8 | $715.20 | July 24, 2025 | - | - |
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| Matthew Pierce | 85 | $715.20 | July 31, 2025 | - | - |
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| Matthew Pierce | 150 | $1,008.00 | August 19, 2026 | - | - |
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| Matthew Pierce | 308 | $96.00 | August 19, 2027 | - | - |
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| Matthew Pierce | 2,000 | $14.40 | February 13, 2028 | - | - |
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| Craig Finster | 26 | $604.80 | April 2, 2024 | - | - |
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| Craig Finster | 156 | $1,087.20 | Sept 27, 2024 | - | - |
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| Craig Finster | 8 | $715.20 | July 24, 2025 | - | - |
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| Craig Finster | 98 | $715.20 | July 24, 2025 | - | - |
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| Craig Finster | 63 | $715.20 | July 31, 2025 | - | - |
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| Craig Finster | 150 | $1,008.00 | August 19, 2026 | - | - |
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| Craig Finster | 308 | $96.00 | August 19, 2027 | - | - |
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| Craig Finster | 2,000 | $14.40 | February 13, 2028 | - | - |
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| Alex Peachey | 3 | $604.80 | April 2, 2024 | - | - |
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| Alex Peachey | 156 | $1,087.20 | Sept 27, 2024 | - | - |
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| Alex Peachey | 8 | $715.20 | July 24, 2025 | - | - |
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| Alex Peachey | 76 | $715.20 | July 24, 2025 | - | - |
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| Alex Peachey | 63 | $715.20 | July 31, 2025 | - | |
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| Alex Peachey | 150 | $1,008.00 | August 19, 2026 | - | - |
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| Alex Peachey | 308 | $96.00 | August 19, 2027 | - | - |
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| Alex Peachey | 2,000 | $14.40 | February 13, 2028 | - | - |
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Director Compensation
All directors hold office until the next annual meeting of shareholders at which their respective class of directors is re-elected and until their successors have been duly elected and qualified. There are no family relationships among our directors or executive officers. Officers are elected by and serve at the discretion of the Board of Directors. The following table sets forth the information concerning all compensation we paid during the year ended December 31, 2023 to our non-employee directors.
| Name | Fees earned or paid in cash ($) | Stock awards ($) | Option awards ($)(7) | Total ($) |
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| Juan Carlos Barrera(1) | — | — | — | — |
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| David Catzel(2) | — | — | — | — |
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| Michelle Gahagan | $100,000 | — | $19,761 | $119,761 |
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| Luis Goldner(3) | — | — | — | — |
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| Keyvan Peymani | $200,000 | — | $57,945 | $257,945 |
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| Jennifer Prince(4) | $100,000 | — | $12,261 | $112,261 |
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| Shannon Pruitt | $100,000 | — | $7,676 | $107,676 |
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| Brian Tingle(5) | $100,000 | — | $19,761 | $119,761 |
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| Paul Vlasic(6) | $100,000 | — | $19,761 | $119,761 |
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| (1) | Mr. Barrera was elected as a director of our company at the shareholder meeting held on December 29, 2023, and was appointed as a director of our company on the same date. Mr. Barrera received no compensation in the year ended December 31, 2023. |
| (2) | Mr. Catzel was elected as a director of our company at the shareholder meeting held on December 29, 2023, and was appointed as a director of our company on the same date. Mr. Catzel received no compensation in the year ended December 31, 2023. |
| (3) | Mr. Goldner was elected as a director of our company at the shareholder meeting held on December 29, 2023, and was appointed as a director of our company on the same date. Mr. Goldner received no compensation in the year ended December 31, 2023. |
| (4) | Ms. Prince was not reelected as a director of our company at the shareholder meeting held on December 29, 2023. |
| (5) | Mr. Tingle was not reelected as a director of our company at the shareholder meeting held on December 29, 2023. |
| (6) | Mr. Vlasic was not reelected as a director of our company at the shareholder meeting held on December 29, 2023. |
| (7) | The amounts reported in the “Option Awards” column reflect the aggregate fair value of stock-based compensation awarded during the year computed in accordance with the provisions of the Financial Accounting Standard Board Accounting Standards Codification Topic 718, or ASC 718. See Note 3 to our consolidated financial statements for the year ended December 31, 2023 included elsewhere in this annual report regarding assumptions underlying the valuation of equity awards. These amounts reflect the accounting cost for these stock options and do not reflect the actual economic value that may be realized by the executive officer upon the vesting of the stock options, the exercise of the stock options, or the sale of the common stock underlying such stock options. |
